Only religious non-profits that have the "inculcation of religious values as (their) purpose," and primarily employ and serve persons that share the same religious values, are exempt.

The decision is frustrating to religious groups who lobbied that exemptions be more broad, to include religiously affiliated hospitals, universities and schools that don't currently offer access to contraception.

"Basically the Obama administration has refused to listen to thousands of religious organizations that have asked them to change this exemption," said Hannah Smith, senior counsel at the Becket Fund for Religious Liberty. "Today, the administration essentially said, you will still have to comply. You have a year to get your house in order."

Smith and the Becket Fund are representing two universities that oppose the legislation and have filed lawsuits against the rule. The lawsuit by Belmont Abbey College in North Carolina is now at the federal district court in Washington, D.C., and Colorado Christian University's suit is in the federal district court in Denver, Colo.

"We will continue to pursue these lawsuits in court, and we are optimistic that the court will see that this mandate is unconstitutional and burdens the free exercise of these religious groups," Smith said.

While an outrage sparked across the nation, other groups cheered the Obama administration, affirming the decision.

"We think this is a huge victory for women's health and religious liberty," said Jessica Arons, director of the Women's Health and Rights Program as part of the Center for American Progress. "This decision honors women's conscience and allows women to determine what is the morally responsible thing for them to do."

Arons dismissed the conflict of employees with a moral objection to contraceptives, comparing it to other health coverage benefits that people don't use.

"If an employee objects to contraceptives, there is no requirement that they have to use it," Arons said. "For the employers, they have a year to work out ways to ensure that their employees have coverage that they need in line with the institution's precepts."

This is considered a great victory for reproductive health organizations including the National Latina Institute for Reproductive Health.

"We applaud President Obama's decision to reject an enormous and harmful expansion that would have denied coverage for birth control for millions of women," said Jessica González-Rojas, executive director of the National Latina Institute for Reproductive Health in a press release. "We talked with Latina women around the country, and they are overwhelmingly in support of contraceptive coverage; no matter where they fall on the political spectrum."

Those directly affected by the rule have not been silent about the issue, and in an address by Pope Benedict XVI before the bishops of Washington, D.C., as transcribed on Zenit, the pope called on U.S. bishops to engage in an effort "to counter a reductive secularism which would delegitimize the church's participation in public debate about the issues which are determining the future of American society."

He specifically mentioned having regard "to the great moral issues of our time: respect for God's gift of life, the protection of human dignity and the promotion of authentic human rights."

The future of this exemption remains in question as the court cases progress, though Smith believes this is only a small part of a larger pattern by the Obama administration.